A Pigouvian Tax: (A) moves production to the socially optimal level of output (B) is the same thing as the Pigouvian subsidy (C) is measured in terms of Pigouvian rupees (D) cannot exist with externalities

UoH 2013 Question 5: Market failure, externalities and public goods

A Pigouvian Tax:

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Market failure, externalities and public goods has come up 114 times in 7 exams since 2006.

This question is on Pigouvian taxes and corrective policy, part of Market failure, externalities and public goods in Microeconomics.

Using taxes or subsidies to make people face the social cost of their actions.

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